It’s Friyay, yo! End your forex trading week on a strong note by checkin’ out USD/CAD’s downtrend and a potential long-term retracement play on GBP/USD!
Remember that downtrend that we spotted earlier this week? Well, it looks like the bears paid attention! See, USD/CAD made new monthly lows after hitting resistance near the 38.2% Fib and 100 SMA levels.
Dollar bears have another shot at hitting the trend now that there’s a steeper trend line in the works. In fact, the pair is currently hitting said trend line after bouncing from its 1.3400 weekly lows.
This time around, it’s the 61.8% Fib, trend line, AND 100 SMA resistance as well as the overbought stochastic signal that could attract sellers into dragging the pair back down into maybe making new lows.
Don’t discount an upside break, though. USD/CAD buyers could always ignore the steeper trend line and push the pair back up to its original trend line nearer to the 200 SMA. Watch out!
Cable is having trouble making new highs above 1.3000, which opens the pair to a possible retracement (if not a reversal) over the next couple of days.
1.2700 is an area to watch as it lines up with not only a broken range resistance but also the 50% Fib retracement on the daily chart. What’s more, the pair is poppin’ up a bearish divergence!
Shorting at current levels could get you a couple of hundred pips if you think that the pound will fall back down to its former resistance area. If you’re one of them trend traders, though, then you can also wait for any downside pressure to ease up and maybe for 100 SMA to cross above the 200 SMA before trading a trend continuation.
In any case, make sure that you place wide stops on long-term setups like these, aight?